Illumina, Inc. (ILMN) recently announced that it has acquired GRAIL, a healthcare company focused on the early detection of multiple cancers. Illumina is a leader in DNA sequencing and array-based technologies. The financial terms of the deal have not been disclosed so far.
Following the news, shares of Illumina remained unchanged to close at $510.61 on Wednesday.
With the buyout, Illumina will gain access to GRAIL’s unique blood test detector, Galleri, which detects 50 different cancers before they are symptomatic.
Though the deal remains under legal scrutiny in the European Union, no such impediment is there for the deal in the U.S.
The CEO of Illumina, Francis deSouza, said, “Since early detection of cancer saves lives, this new genomic test will be nothing short of transformational for human health and the economics of healthcare.” (See Illumina stock chart on TipRanks)
Recently, Canaccord Genuity analyst Kyle Mikson CFA reiterated a Buy rating on the stock. The analyst, however, raised the price target from $515 to $555, which implies upside potential of 8.7% from current levels.
According to the analyst, the buyout of GRAIL can be beneficial for the company. However, the heightened adoption of sequencing-based technologies can act as a tailwind for the company in the long run.
Consensus among analysts is a Hold based on 4 Buys, 3 Holds and 2 Sells. The average Illumina price target of $489.22 implies downside potential of 4.2% from current levels. Shares have gained 44.5% over the past year.